Dividend Increase - Philip Morris International Inc. has raised its quarterly dividend by 8.9% to $1.47 per share, with the annualized dividend now totaling $5.88 per share, marking a total increase of 219.6% since 2008 [1][8] - The next dividend payment is scheduled for October 20, 2025, to shareholders on record as of October 3, 2025 [1] Growth Strategy - The company's long-term growth strategy is focused on its smoke-free transformation, with smoke-free products contributing 41% of total net revenues in Q2 2025, growing 15.2% year over year [2] - Key products driving this growth include IQOS, ZYN, and VEEV, positioning the company for sustainable growth and long-term value creation [2] Traditional Cigarette Business - Despite volume declines, the traditional cigarette business remains resilient, with combustible net revenues growing 2.1% in Q2, driven by price increases [3] - Marlboro achieved its highest quarterly market share since the 2008 spin-off, reinforcing the brand's strength and pricing leadership [3] Cost Efficiency Initiatives - The company achieved over $500 million in gross cost savings in the first half of the year through optimization initiatives, aiming for $2 billion in gross cost efficiencies between 2024 and 2026 [4] - By mid-2025, the company has already realized more than $1.2 billion in cost efficiencies, contributing to margin expansion [4] Earnings Outlook - Management has lifted its full-year adjusted earnings per share guidance to a range of $7.43-$7.56, indicating a growth of 13-15% [5] - This outlook reflects management's confidence in sustaining double-digit earnings growth despite ongoing regulatory and currency challenges [5] Stock Performance - Over the past six months, Philip Morris stock has risen 7.6%, compared to the industry's growth of 15.7% [10]

Group 1: Company Performance - Broyhill Asset Management reported a 3.7% net appreciation in its Broyhill Partners fund for Q2 2025, which is lower than the MSCI All Country World Index's return of 11.7% for the same period [1] - Over the six months ending June 30, the fund achieved a return of 6.6%, compared to the index's 10.3% [1] Group 2: Philip Morris International Inc. (NYSE:PM) - Philip Morris International Inc. experienced a 16% gain in Q2 2025, driven by its smoke-free product portfolio, particularly ZYN and IQOS [3] - The stock's one-month return was -5.82%, but it appreciated by 33.92% over the past 52 weeks, closing at $161.76 on September 18, 2025, with a market capitalization of $251.794 billion [2] - Despite the stock's valuation expanding to around 20x forward earnings, it still trades below market multiples, indicating a strong growth potential in the consumer staples sector [3] - Philip Morris was held by 111 hedge fund portfolios at the end of Q2 2025, an increase from 104 in the previous quarter [4]

Core Insights - Philip Morris International Inc has announced an 8.9% increase in its regular quarterly dividend, raising the annualized payout to $5.88 per share, with the new quarterly dividend of $1.47 payable on October 20 [1][2] - Since becoming a standalone public company in 2008, Philip Morris has raised its dividend every year, with a cumulative increase of 219.6%, reflecting a compound annual growth rate of about 7.1% [2] - The company has lifted its adjusted earnings per share forecast for fiscal 2025 to a range of $7.43 to $7.56, and expects organic net revenue growth of 6% to 8% for 2025 [3] Financial Projections - Philip Morris anticipates a 1% decline in international cigarette and heated tobacco unit volumes (excluding China and the U.S.) in 2025, while projecting its own total shipment volumes to grow around 1% [4] - The growth in total shipment volumes is expected to be driven by a 12% to 14% increase in smoke-free products, which will partially offset an anticipated ~2% decline in cigarette volumes [4] - For the third quarter, the company has guided to adjusted EPS of $2.08 to $2.13 [4] Market Performance - PM shares were trading higher by 2.81% to $166.30 [5]

Group 1 - Philip Morris International Inc. (NYSE:PM) is recognized as one of the 15 best performing dividend stocks in 2025, with a stock surge of nearly 36% since the beginning of the year [1][3] - The company has successfully transitioned to next-generation, smoke-free products, such as IQOS heat-not-burn tobacco sticks and ZYN oral nicotine pouches, contributing to its stock performance [3] - Philip Morris has maintained a solid dividend policy, rewarding shareholders with growing dividends for the past 15 years, currently offering a quarterly dividend of $1.35 per share and a dividend yield of 3.31% as of September 15 [4] Group 2 - The company was established in 2007 after splitting from Altria, focusing on international markets where cigarette sales have been stronger [2] - In the second quarter, while cigarette sales volume decreased by 1.5%, organic revenue from cigarettes still grew by 2%, indicating resilience in its core business [2]

Industry Overview - The tobacco industry is experiencing a strong year, contrary to the belief that it is shrinking, with significant sales growth in non-cigarette products [1] - The FDA has agreed to fast-track the approval process for nicotine pouches, a move influenced by the White House, indicating a favorable regulatory environment for the industry [1][3] Product Development - The FDA has historically taken a long time to approve new nicotine delivery methods, but recently approved 20 flavors of Zyn, a leading nicotine pouch brand owned by Philip Morris International, after a five-year review [2] - The agency is now expediting the approval process for pouch products from four industry leaders, with potential legal launches expected by December [3] Financial Performance - A basket of six global tobacco stocks has yielded an average total return of 43% year-to-date, showcasing strong market performance [6] - Philip Morris International reported a 32% year-over-year increase in shipments of oral smoke-free products, surpassing 200 million cans in the Americas [6] - Altria reported a 26% year-over-year growth in shipments of its Zyn competitor, with its share price up 27% year-to-date [6] Historical Context - The tobacco industry has historically outperformed all other sectors in the US from 1900 to 2015, providing financial benefits to municipalities through securitized payments from major tobacco companies [4]

Core Viewpoint - Philip Morris' stock has shown strong performance over the past year, and this trend is expected to continue for the foreseeable future [1]. Group 1: Investment Strategy - The focus is on dividend-paying companies, emphasizing the importance of stable and growing dividends for achieving high risk-adjusted long-term returns [1]. - The approach involves analyzing companies in depth and formulating compelling arguments to enhance the investment process and assist other investors [1]. Group 2: Analyst's Position - The analyst holds a beneficial long position in the shares of Philip Morris and other related companies, indicating a personal investment interest [2].

Core Insights - Philip Morris International Inc. has published its 2025 Sustainability Materiality Report, which includes the results of its latest global sustainability materiality assessment [1] - The report follows the principles of double materiality and outlines key sustainability topics along with their associated impacts, risks, and opportunities [1] - The assessment aligns with the EU Corporate Sustainability Reporting Directive (CSRD) [1] Sustainability Topics - The report identifies key sustainability topics that are significant for the company and its stakeholders [1] - It emphasizes the importance of understanding consumer and end-user perspectives in sustainability efforts [1]

Company Overview - Defiance ETFs has launched the Defiance Daily Target 2X Long PM ETF (Ticker: ZYN), which offers investors 2X daily exposure to the performance of Philip Morris International Inc. (NYSE: PM) [1][2] - Philip Morris International is a leading international tobacco company that manufactures and sells cigarettes, smoke-free products, and associated devices, focusing on transitioning adult smokers to less harmful alternatives through its IQOS platform [3] Fund Objectives and Structure - The ZYN fund aims to deliver daily investment results of 200% of the daily performance of Philip Morris International Inc., utilizing derivatives such as swaps and options to achieve its leveraged objectives [2] - The fund is designed for knowledgeable investors who understand the risks associated with seeking daily leveraged investment results and are willing to actively monitor their portfolios [4][10] Industry Context - The tobacco and reduced-risk product industry faces various challenges, including regulatory pressures, litigation risks, and changing consumer preferences, which could impact the performance of companies like Philip Morris International [9]

Core Insights - Philip Morris is targeting a 13% to 15% growth in EPS for the year, reaffirming its guidance in a recent press release [2] - The company has been undergoing a smoke-free transformation for over 10 years, achieving its strongest growth since 2011, excluding the post-pandemic recovery [2] - Despite focusing on smoke-free products, the company is still seeing positive volume growth across its total business [3] Company Strategy - The emphasis is on transitioning from combustible products to smoke-free alternatives, including heat-not-burn and vaping products [3] - The company is committed to maintaining pressure on its combustible business while promoting smoke-free innovations [3]

Financial Data and Key Metrics Changes - The company reaffirmed its guidance for a 13% to 15% growth in EPS for the closing year [1] - The company reported its strongest growth since 2011, excluding the post-pandemic recovery [2] - There is an expectation of margin expansions this year, with previous hiccups in margins now behind [12] Business Line Data and Key Metrics Changes - Strong growth in IQOS and ZYN volumes, with ZYN already in 47 markets and expanding [5] - The company is experiencing positive volume growth in the tobacco and nicotine industry for five consecutive years [3] - The smoke-free product mix is contributing positively to both top-line revenue and gross margins [4][11] Market Data and Key Metrics Changes - The U.S. market is seeing intensified competition, particularly for ZYN, which has a price premium of over 65% compared to competitors [9][19] - The company is normalizing inventory levels after a period of stock limitations due to undercapacity [7] - The company is observing a strong pricing environment for combustible cigarettes, supported by a favorable tax environment [3] Company Strategy and Development Direction - The company is focused on smoke-free transformation and sees significant growth potential in this category [2][26] - There is a strategic emphasis on multi-category presence, including heat-not-burn, e-vape, and oral nicotine pouches [36] - The company is committed to continuous product innovation to meet evolving consumer expectations [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the smoke-free product category's growth potential, despite regulatory challenges in some markets [14][42] - The company anticipates that the competitive landscape will remain challenging but believes ZYN has a strong brand position [33] - Management noted that the currency environment is favorable, which supports the company's financial trajectory [57] Other Important Information - The EU is recognizing nicotine pouches for tax purposes, which is seen as a positive development for the company [44] - The company is awaiting regulatory approvals for IQOS in the U.S., with expectations leaning towards a 2026 launch [48] Q&A Session Summary Question: How should one think about ZYN shipment numbers for 2H '25? - Management suggested that shipment numbers should be based on sell-through growth rates applied to previous shipment figures [15][16] Question: What is the pricing strategy for ZYN given the competitive landscape? - Management acknowledged the high price premium of ZYN and indicated that marketing efforts would be ramped up to maintain market presence [20][21] Question: What is the outlook for IQOS growth in light of the flavor ban in Europe? - Management indicated that the flavor ban is being adjusted, and IQOS is expected to return to its growth trajectory [39] Question: How does the company view potential M&A opportunities? - Management stated that the company is currently self-sufficient and does not see immediate gaps in its product portfolio that would necessitate M&A [59][60] Question: What is the expected impact of the EU Tobacco Excise Directive? - Management noted that while the directive is being discussed, it is not expected to create major disruptions for the company's smoke-free product support [43][46]